[March 22, 2014]WASHINGTON (Reuters) — The World
Bank's board on Thursday approved a $73 million grant to help the
Democratic Republic of Congo develop an expansion of the Inga
hydroelectric dam, potentially the largest hydropower site in the world.
The money, combined with another $33 million from the African
Development Bank, will fund technical studies to analyze the dam's
environmental and social impact and ensure it is sustainable, the
World Bank said in a statement.
The grant will also help establish the independent Inga Development
Authority, which is meant to follow best international practices in
managing the project and selecting private companies to help fund
it, the bank said.
The World Bank ranks Congo among the world's 10 most difficult
places to do business. For decades, projects to expand the Inga dam
never got off the ground due to conflict and misrule. And
environmental groups warn large dam projects are known for long
delays and budget overruns.
The World Bank, a poverty-fighting institution based in Washington,
estimates that Congo has 100 gigawatts of hydropower potential, the
world's third largest behind China and Russia.
But only 9 percent of Congo's 65 million people have access to
electricity, and the mining sector on which the economy relies has
been hamstrung by lack of power.
But now a deal with South Africa to buy electricity from Inga has
revived talk of the giant hydro project, which could harness the
Congo River's enormous energy to eventually power half of Africa.
Three international consortiums are bidding for the contract to
build the dam, known as Inga III, and sell the power it generates,
estimated at 4,800 MW.
This is nearly three times the amount of power produced from Inga's
two existing dams, which are decades old and have been crippled by
neglect, government debt and risk-averse investors.
"Inga 3 ... is undoubtedly the most transformative project for
Africa in the 21st century," Congo's Prime Minister Augustin Matata
Ponyo said in a statement.
The World Bank said under the current plan, South Africa would buy
2,500 megawatts from Inga III, and another 1,300 megawatts will be
sold to Congo's power-starved mining industry.
The remaining 1000 megawatts would go to the national utility SNEL,
helping provide power to an estimated 7 million people around
Kinshasa, Congo's capital, and covering all the projected unmet
electricity needs there by 2025.
"This significant additional energy access for households and small
businesses could only be financed and developed by combining it with
electricity sales to credit-worthy business and other regional
users," the bank said in its statement.
Campaign group International Rivers has criticized the project for
not benefiting enough of the local population. It has called on the
World Bank to fund smaller, more local energy projects, such as
solar and wind power, that it says would be less environmentally
damaging and more effective.
The group cites a study from University of Oxford researchers that
shows large dams overran their initial budget by 96 percent on
average, and also had long delays, making them unlikely to produce
positive returns.
"We will continue to push the World Bank and the DRC government to
support clean local energy solutions rather than Africa's next white
elephant," International Rivers' policy director Peter Bosshard said
in a statement on Thursday.
The World Bank said its technical assistance funds will not go
towards construction or operation of the dam, and it has not yet
decided on whether to support the construction of Inga III, which is
proposed to cost $12 billion.
"By being involved in the development of Inga 3 ... from an early
stage we can help ensure that its development is done right so it
can be a game changer by providing electricity to millions of people
and powering commerce and industry," said Makhtar Diop, the World
Bank's vice president for Africa.
Success for Inga III would help raise investors' confidence in the
remaining five stages of the Grand Inga project. At an estimated
cost of $50-80 billion, Grand Inga would produce 44,000 MW, dwarfing
all other hydro-electric projects in the world, including China's
Three Gorges Dam.
(Reporting by Anna Yukhananov; editing by Chizu Nomiyama)
